Showdown on Molokai

In March, Molokai Properties Ltd., the owner of the island's two largest and most popular hotels, shuttered them following fierce local opposition to a real estate development that the company wanted to build along the southwestern coast.

The closure of the 65,000-acre Molokai Ranch, including the 22-room Molokai Lodge and the 40 furnished seaside tents at the Beach Village at Molokai Ranch, is the latest in a series of starts and stops for Molokai tourism, which began in 1977 with the opening of the 198-room Kaluakoi Resort and condo complex on the West End. Virtually abandoned since the early 1980s, the resort was purchased by Molokai Properties, a subsidiary of Hong Kong–based Guoco Group Ltd., in 2001. At the time, local officials and many residents hoped that the company, which had opened the Beach Village in 1996 and the Lodge in 1999, would resuscitate Kaluakoi, attracting tourists and adding jobs. But apart from a $500,000 golf course renovation, Molokai Properties left the resort an untouched eyesore. In 2006, the company announced that it would renovate the hotel as part of a master development plan that included the sale of 200 homesites (at $600,000 each) along La'au Point—the picturesque southwestern tip, accessible only by boat or a strenuous hike. Local reaction was negative, forceful, and immediate. The most visible display of residents' opposition to the plan was the hand-painted signs reading SAVE LA'AU that were tacked to trees and lanais all along the hilly ribbon of road that traverses the 38-mile-long island.

Locals say that the reasons for their opposition to the La'au Point project were numerous: the diversion of water resources needed for agriculture; the effect that the development would have on Penguin Banks, the shallow, 40-mile fish hatchery just off La'au Point (which is not only important to fishermen but hosts the highest concentration of endangered monk seals in the state); and the further erosion of the fishing and hunting that are integral to the lifestyle of many on Molokai.

Native Hawaiians throughout the state voice similar complaints over how an increase in expensive vacation home construction is driving up real estate prices, taxes, insurance, and the overall cost of living. While Molokai remains a largely undeveloped isle, on beachfront homesites in west Molokai there's no shortage of backhoes, clearing the way for multi-acre estates complete with gates, cameras, security stations, and, in the case of software developer John McAfee, an Asian--inspired $6.3 million manse with an entrance pagoda and a pair of 15-foot Chinese metal horse sculptures. Last year, Maui's riot police were brought to the island to quell locals when they learned that McAfee was attempting to sell 510 acres of Molokai land on eBay.

Among the supporters of the La'au Project, who saw it as a boon to the island's depressed economy and high unemployment, was Governor Linda Lingle, a former Molokai resident. The Ranch was also the island's largest employer: 120 jobs were lost when it closed (doubling Molokai's unemployment rate to 12 percent)—including those at its cattle ranch, movie theater, gas station, and general store.

For now, it looks like Molokai Ranch is closed for good. CEO Peter Nicholas said in a written statement that the property's assets will be "mothballed." Repeated calls and e-mails to Nicholas by Condé Nast Traveler were not returned. Islanders note the swimming pools filled with sand, the barbed wire surrounding the gutted lodge, the dismantled tentalows, and the parched golf course where grass on the fairways is a foot high, and wonder what is the owner's true intent. "I thought the definition of mothballing was some kind of preservation," says Brandon Roberts, a reporter for the Molokai Dispatch. "They recently cut down thirty healthy coconut trees all over the golf course. There's a symbolism to that."

Molokai Properties owns 40 percent of the island, and tourism officials says it's unlikely that the company will sell any of its land, although Molokai Properties has said that it would consider leasing certain operations, such as the movie theater, to former employees. At a May community meeting, a state official announced that there had been more than one offer to buy the Kaluakoi Resort and golf course but that Molokai Properties had refused the bids. With the Molokai Ranch lands now off-limits, tourism officials are focusing their promotional efforts on other areas of the island, including a nineteenth--century leper colony on the northeast coast. "Now that Father Damien (the Belgian priest who administered the leper colony) is closer to being named a saint, we're seeing more religious tourists coming here," says Julie-Ann Bicoy, director of the Molokai Visitors Association.

In the meantime, some locals are courting mainland conservation groups in the hope that they might convince Molokai Properties to sell them their land. "We want tourism we can control," says Walter Ritte, Jr., an activist who led the opposition to developing La'au Point as well as ports of call for cruise lines. "We want to limit visitor numbers. Why upset the lifestyle of the islanders for people who want to buy T-shirts? This is a Hawaiian island, not a tourist island."